Warren Buffett has been nicknamed the “Oracle of Omaha” for his ability to predict and profit from long range economic trends.  His most recent forecast?  The economy will get better after housing gets better:  [Thanks L!] The chairman and CEO of the conglomerate Berkshire Hathaway Inc. said he thinks people will be surprised how quickly employment improves once the excess houses are bought and normal levels of construction resume. “We will come back big-time on employment when residential construction comes back,” Buffett said. Buffett thinks this is liable to happen quickly.  There is strong evidence however, that the Oracle may…
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When Ken Lewis expressed his confidence in his due-diligence team when they bought Countrywide Mortgage back in 2008, he wasn’t the only one: “Buying Countrywide was a gutty move,” said Donald Hodges of Hodges Capital Management in Dallas, which oversaw $1.1 billion including 39,000 Bank of America shares as of Sept. 30. “The whole concern about housing and the economy has been greatly exaggerated.” We here at Doom had a different opinion and said that the deal came straight from the Braver or dumber than I am Department. Now Bank of America has realized what was obvious to a couple…
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HAMP, the administration’s loan modification program has been labeled a failure in most circles.  Dissatisfaction has run high: 76% of borrowers had a “negative” or “very negative” experience with the program, and fewer than 9% found it “positive” or “very positive.” Almost half of applicants waited longer than seven months to receive a decision on their application. Nearly 75% of the time loan servicers lost documentation – which they then used to turn down applications. A Congressional oversight panel labeled the program a failure in December 2010. The Treasury Department has asked loan servicers to fix the problems but has…
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I don’t always blame the MSM for not asking hard questions from “experts” in the housing industry. After all, if they don’t specialize in housing, they might not recognize baloney when they hear it. Often though, you have to wonder how they missed the obvious. Yesterday’s Orange County Register ran an article about the likely drop of the conforming limit in many areas this October: If conforming loan limits drop in October, more than 30,000 families in California will have to deal with higher down payments and mortgage rates and tougher loan qualification rules, the California Association of Realtors said…
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We often quote Rick Sharga of RealtyTrac here.  He often has better data and less spin to his analysis than we generally see quoted. Sharga appeared on Bloomberg on Monday.  I thought the interview was good enough to post here.  Sharga discusses the general state of the housing market, what’s selling and what’s not, as well as mortgage trends.   Note his comments about the lack of a move-up market.  While sales are generally brisk at the lower end of the spectrum, the upper end is dead.  That’s going to continue to put downward pressure on prices. It was also…
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Two days ago the Obama administration launched one more program to “help” homeowners facing foreclosure.  Here’s the thumbnail sketch of the program: The program functions by giving out interest-free loans to homeowners who meet the program’s guidelines. NeighborWorks says the borrowed funds will pay a portion of an approved applicant’s monthly mortgage including missed mortgage payments or past due charges including principal, interest, taxes, insurance, and attorney fees; a homeowner can borrow up to $50,000, or two years’ worth of loans to supplement mortgage payments, whichever comes first. The EHLP program is expected to assist 30,000 homeowners through the program, with…
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You know that a lot of folks must be walking away from their mortgage when developers decide to market a project just for them. [Hat tip M.R.!] Even some with high-paying jobs are leaving their homes and letting them slide into foreclosure when they owe more than their property is worth. For those people, buying another home isn’t an option, at least not in the immediate future. So what can they do? They can rent. Miramonte Homes, a Tucson-based builder, will soon unveil a new line of luxury rental homes in Tucson and Sierra Vista to fill just that niche,…
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I suppose in the messed up world of robo-signing and fraud-closure, this shouldn’t be so surprising, but who knew you could buy a stolen house? Pity the poor Zahari family, who bought their first home last summer:  [Thanks L!] They custom painted the girls’ bedrooms and sodded the backyard. They stopped making improvements when they found out they’re not the legal owners of the home. “We actually got a call from the FBI who said we just wanted to inform you that your house has been part of a deed fraud scheme,” Zahari said. Karen Tappert is the person the…
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It’s been awhile since I’ve been slumming over at Realty Times. [As much as I used to criticize their former editor, Blanche Evans, I think it was a better site when she was in charge.] I was struck by the title of one of the current articles, Why Own My Own Home? I have slogged through many Dream of Homeownership articles over the years that explained why it was the dream of every American to own their own home and the duty of the U.S. government and the mortgage industry to get us one. I find it interesting that now…
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Investors have been a huge part of the housing market recently.  There’s a lot of folks who figure that prices have neared the bottom, and it’s time to jump back in. So where are the investors seeing the biggest returns?  Multi-family, single family, commercial? It turns out that the late George Carlin was right.  He said that the reason that people owned houses was because they needed “a place to put their stuff”.  In a world where folks are foreclosed on, downsizing, and/or moving in with relatives, they need an alternate place to put their stuff– in their storage units….
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During the housing boom, the mortgage mantra seemed to be “No income, no credit, no problem!”  Today however, in the interest of reducing risk, there is a push for tougher requirements and a 20% down payment requirement. As one might imagine, the housing industry is not embracing the pendulum swinging back so far: [Thanks M.R.!] Among the most hotly contested ideas bank regulators have proposed to reduce the risk of another financial crisis is rule making a 20 percent down payment mandatory on some new home loans. Consumer advocates, civil rights groups and lending industry groups alike have said the…
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When we sold our house in 2005 and moved into a rental, we were asked by concerned friends, “Are you doing OK?” Obviously you wouldn’t be in a rental unless you were in financial straits. In 2006 when we launched Doom, I couldn’t convince reporters that I wasn’t either “bitter” or “priced out of the market”. [I never could figure the latter out.  Lenders were passing out loans to anyone who could fog a mirror.  How could anyone be priced out?] I suspect most fellow “voluntary renters” kept that fact secret if they could. Five years later, the world has…
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Truly an interesting week.  Took a break from the Texas drought and spent a very wet week in Connecticut.  Since I was here six months ago, at least where I was visiting, there seems to be a lot more “for sale” signs and a much tighter single family rental market.  Potential buyers are nervous and uncertain about purchasing, and renting has become a more “respectable” option. Nerves are also playing havoc with new home sales.  The Commerce Department is reporting that [Despite the headline MOM numbers being up.] sales are down 23% YOY.  If things aren’t bad enough, there are…
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It’s being called a “double dip”, a “triple dip”, a “moderation” or a “recovery”.  Whatever you call it though, it’s headed south.  According to the National Association of Realtors this morning: Existing-home sales1 which are completed transactions that include single-family, townhomes, condominiums and co-ops, eased 0.8 percent to a seasonally adjusted annual rate of 5.05 million in April from a downwardly revised 5.09 million in March, and are 12.9 percent below a 5.80 million pace in April 2010; sales surged in April and May of 2010 in response to the home buyer tax credit. I’m headed off to Connecticut for the…
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  The Obama administration has had several anti-foreclosure programs which have all had varying rates of failure.  Not to be discouraged by large price tags and dismal results, the administration has got another idea. WASHINGTON — The Obama administration is pushing for the creation of a federal account funded by the nation’s 14 largest mortgage firms to help distressed borrowers avoid foreclosure and settle ongoing probes into faulty mortgage practices, according to a confidential term sheet reviewed by The Huffington Post. The fund is one of three proposed by a coalition of state attorneys general and administration officials, which were…
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